Analysts at Berenberg downgraded real estate firm Empiric Student Property from ‘buy’ to ‘hold’ on Wednesday, stating that normalisation had been delayed.
Berenberg said Empiric’s first-half results highlighted not only the progress the company had made in refining its portfolio but also operational risks that were “increasingly likely” to affect its full-year performance in 2022.
“The current booking rate stands at just 70%, less than six weeks ahead of the new academic year,” said Berenberg. “As such, while we expected the booking cycle to be back-end-loaded, there is now the very real risk that higher vacancy rates will persist, delaying the company’s operational recovery from Covid-19.”
The German bank, which kept its 100.0p target price on the stock unchanged, also added that Empiric’s rebased dividend, coupled with a valuation in “the upper quartile of its long-term range”, may present a headwind for the company in light of its income-biased shareholder register.
Analysts at Deutsche Bank raised their target price on plastic piping manufacturer Genuit from 653.0p to 708.0p on Wednesday, citing the group’s “strong” first-half performance.
Deutsche Bank pointed to Genuit’s adjusted interim operating profit of £48.6m, eclipsing its 2019 first-half performance by roughly 24% as it primary reason for the upgrade but also noted that the company appeared to be continuing to trade well, prompting a rise in management’s expectations for the full year.
“We raise our 2021-2023E operating profit forecasts by 4-7% and our target price by circa 8%,” said the German bank, which also reiterated its ‘buy’ rating on the stock.
“The company remains a strong performer, with recent acquisitions operating at or above expectations (three in February alone indicative of a team that does not let the grass grow under its feet).”
